Penalty on Failure to Generate eWay Bill – Be Alert!

e-Way bills have become an integral part of inter-state & intra state transport for people in India. Failing to show e-Way bill at the time of inspection can result into severe consequences. In this article, we would be discussing the consequences which the supplier and the transporter can face in absence of an e-Way bill.

Consequences of non-generation of e-Way bill for supplier

When a supplier does not generate an e-Way bill and sends his goods for inter-state or with-in state transport, he will be charged with monetary penalty of ₹10,000 or the applicable tax (whichever is higher). This means that irrespective of the situation, the supplier will be fined at least ₹10,000.

Consequences of non-generation of e-Way bill for transporter

Now coming to the transporter’s side. The rule says that if the supplier has not generated the e-Way bill, then it is the transporter’s duty to generate the e-Way bill before the transit begins. If by any chance the transporter also ignores e-Way bill then upon inspection, the officer reserves the right to detain the goods.

Once the goods have been detained by the officer, then the following needs to be followed:

The owner must pay the penalty. The amount would be 100% of tax payable.

50% of the value of goods which was being transported without an e-Way bill.

Can I be exempted from paying penalties and taxes without generating an e-Way bill?

How to determine the value of goods for an e-Way bill?

For this purpose, let’s take an example. Suppose Mr. Vijay is transporting goods amounting to ₹48,000 from Kolkata to Delhi. Now after adding GST, the value on tax invoice will become greater than ₹50,000. Therefore, e-Way bill will be required. It is always advised to generate e-Way bill before transit begins. This allows the transportation to move freely. Failing to comply with the given regulations will create harassment for the supplier as well the transporter.